Documents & Reports

Mobilizing revenue (English)

Abstract

This note reviews key shortcomings in Pakistan's revenue mobilization system and provides directions for revitalizing it and raising collection by 3-4 percentage points of Gross Domestic Product (GDP) over the next five years. Pakistan has one of the ... See More +This note reviews key shortcomings in Pakistan's revenue mobilization system and provides directions for revitalizing it and raising collection by 3-4 percentage points of Gross Domestic Product (GDP) over the next five years. Pakistan has one of the world's lowest tax ratios, stemming from five main weaknesses: complexity, a narrow tax base, low compliance, inefficient tax administration, and low and declining provincial tax revenues. Complexity provides scope for discretion and corruption. A narrow tax base and low compliance are the outcomes of inequitable exemptions and preferential treatments, low tax registration or filing, and massive tax evasion by potential taxpayers that prefer to stay informal. Provincial taxation is low and declining. For its part, nontax revenue is also declining.
See Less -